SEHK:8506

Stock Analysis Report

Executive Summary

China Futex Holdings Limited, an investment holding company, engages in the research and development, manufacture, and sale of circular knitting machines in the People's Republic of China, South Korea, India, Bangladesh, Turkey, Egypt, and internationally.


Snowflake Analysis

Undervalued with excellent balance sheet.

Share Price & News

How has China Futex Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 8506's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.0%

8506

4.5%

HK Machinery

5.3%

HK Market


1 Year Return

30.1%

8506

-15.8%

HK Machinery

-20.4%

HK Market

Return vs Industry: 8506 exceeded the Hong Kong Machinery industry which returned -14.4% over the past year.

Return vs Market: 8506 exceeded the Hong Kong Market which returned -22.7% over the past year.


Shareholder returns

8506IndustryMarket
7 Day-2.0%4.5%5.3%
30 Day4.3%-14.8%-8.5%
90 Day40.0%-18.6%-14.7%
1 Year30.1%30.1%-13.3%-15.8%-17.6%-20.4%
3 Yearn/a23.9%15.9%-2.5%-12.3%
5 Yearn/a16.7%7.0%-5.7%-20.9%

Price Volatility Vs. Market

How volatile is China Futex Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is China Futex Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 8506 (HK$0.14) is trading below our estimate of fair value (HK$0.3)

Significantly Below Fair Value: 8506 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 8506 is good value based on its PE Ratio (6.3x) compared to the Machinery industry average (8.6x).

PE vs Market: 8506 is good value based on its PE Ratio (6.3x) compared to the Hong Kong market (8.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 8506's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 8506 is good value based on its PB Ratio (0.9x) compared to the HK Machinery industry average (0.9x).


Next Steps

Future Growth

How is China Futex Holdings forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

7.9%

Forecasted Capital Goods industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as China Futex Holdings has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has China Futex Holdings performed over the past 5 years?

23.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 8506 has a large one-off loss of CN¥8.4M impacting its September 30 2019 financial results.

Growing Profit Margin: 8506's current net profit margins (15.6%) are higher than last year (14.5%).


Past Earnings Growth Analysis

Earnings Trend: 8506's earnings have grown significantly by 23.8% per year over the past 5 years.

Accelerating Growth: 8506's earnings growth over the past year (5.7%) is below its 5-year average (23.8% per year).

Earnings vs Industry: 8506 earnings growth over the past year (5.7%) underperformed the Machinery industry 5.8%.


Return on Equity

High ROE: 8506's Return on Equity (15.1%) is considered low.


Next Steps

Financial Health

How is China Futex Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 8506's short term assets (CN¥172.5M) exceed its short term liabilities (CN¥63.6M).

Long Term Liabilities: 8506 has no long term liabilities.


Debt to Equity History and Analysis

Debt Level: 8506's debt to equity ratio (34.6%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if 8506's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 8506's debt is well covered by operating cash flow (39.1%).

Interest Coverage: 8506's interest payments on its debt are well covered by EBIT (16.7x coverage).


Balance Sheet

Inventory Level: 8506 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 8506's debt is covered by short term assets (assets are 3.8x debt).


Next Steps

Dividend

What is China Futex Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate 8506's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 8506's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 8506's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 8506's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 8506's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

China Futex Holdings has no CEO, or we have no data on them.


Leadership Team

NamePositionTenureCompensationOwnership
Yuan Yuan
Chairlady2.33yrsCN¥289.00kno data
Yihui Chen
Executive Director3.75yrsCN¥294.00k8.12% CN¥11.9m
Lina Wang
CFO & Finical Controllerno datano datano data
Jingyang Zhao
Sales Managerno datano datano data
Lai Chun Huen
Company Secretary1.33yrsno datano data

2.3yrs

Average Tenure

38yo

Average Age

Experienced Management: 8506's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Yuan Yuan
Chairlady2.33yrsCN¥289.00kno data
Yihui Chen
Executive Director3.75yrsCN¥294.00k8.12% CN¥11.9m
Xudong Hu
Independent Non-Executive Director2.33yrsCN¥60.00kno data
Shing Kei Shum
Independent Non-Executive Director2.33yrsCN¥84.00kno data
Zhirong Mu
Independent Non-Executive Director2.33yrsCN¥60.00kno data

2.3yrs

Average Tenure

47yo

Average Age

Experienced Board: 8506's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.3%.


Top Shareholders

Company Information

China Futex Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Futex Holdings Limited
  • Ticker: 8506
  • Exchange: SEHK
  • Founded: 2016
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: HK$147.000m
  • Shares outstanding: 1.00b
  • Website: https://www.kx-machine.com

Number of Employees


Location

  • China Futex Holdings Limited
  • Xiawei Village
  • Fugong Town
  • Longhai City
  • Fujian Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
8506SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary Shares of HK$0.01HKHKDJan 2018

Biography

China Futex Holdings Limited, an investment holding company, engages in the research and development, manufacture, and sale of circular knitting machines in the People's Republic of China, South Korea, India, Bangladesh, Turkey, Egypt, and internationally. It manufactures and sells single and double circular knitting machines; and parts of circular knitting machines, as well as sells consumables. The company was incorporated in 2016 and is headquartered in Longhai City, China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/01 14:22
End of Day Share Price2020/04/01 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.